KCA slashes spot rate to Rs 11,000, lint prices continue to fall on cotton market

No change was seen in existing outlook on the cotton market on Thursday as prices remain still on downward due to slow demand, in the meantime, some exporters were active and made buying, dealers said. Karachi Cotton Association (KCA) official spot rate continued to be reduced for the third consecutive day, thus showing a slide of Rs 1000, since the week started, shedding further Rs 300 to Rs 11,000, they said.
In Sindh and Punjab phutti price of low type was at Rs 3000 and superior type at Rs 4000, they said. In ready business nearly 2000 bales of cotton changed hands between Rs 9,500-11600, they added. According to the market sources the mills were sidelined to see the negative impacts of continued fall of rates in the global market on the local prices.
On the other hand, predictions of higher crop for the coming season and rise in cost of input are adding factors behind the dullness in the market, they said. According to the China Cotton Association (CCA), drought in China's main cotton-growing region in the north is likely to continue, damaging cotton seedlings there. It's not a good report, it may cut the size of cotton production in China, analysts said.
On Wednesday the US cotton futures tumbled again, with most of the decline in nearby contracts attributed to switches ahead of first notice day, and some brokers said negative technical charts and ample supplies anticipated in the global market have also pressured prices. At least 10 to 15 cents of the price is dry weather," said Jobe Moss of MCM Inc in Texas.
The front-month May cotton contract on ICE Futures US tumbled 6.65 cents to finish at $1.8377 per lb. Most-active July was also sharply lower, falling 4.10 cents to end at $1.6740 per lb. New-crop December cotton settled with a small 0.29 cent gain at 99.90 cents per lb.
Brokers were somewhat puzzled about the degree of the price drops. But, with first notice day for May futures approaching on Monday and one more day left to trade the contract with markets closed for the Good Friday holiday, many players holding May cotton have been anxious to sell out all week. Trading volume slipped to 26,859 contracts, down from 34,202 lots that changed hands on Tuesday, according to Thomson Reuters preliminary data.
The following deals were reported: 200 bales of cotton from Shahdad Pur sold at Rs 9500, 200 bales of cotton from Saleh Pat at Rs 10500, 400 bales from Rahim Yar Khan at Rs 10000, 200 bales from Rahim Yar Khan at Rs 11000, 200 bales from Haroonabad at Rs 10000, 200 bales of cotton from Lodhran at Rs 9900, 200 bales of cotton from Faqir Wali at Rs 10000, 200 bales from Dera Ghazi Khan at Rs 11600 on (Credit) and 200 bales from Sadiqabad at Rs 10000, they added.

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The KCA Official Spot Rate for Local Dealings in Pak Rupees

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FOR BASE GRADE 3 STAPLE LENGTH 1-1/32"

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                                    MICRONAIRE VALUE BETWEEN 3.8 TO 4.9 NCL

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Rate              Ex-Gin   Upcountry   Spot Rate    Spot Rate    Difference

                    For      Price     Ex-Karachi  Ex. KHI. As   Ex-Karachi

                                                  on 20.04.2011

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37.324 Kgs      11,000       120      11,120       11,420              -300

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Equivalent

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40 Kgs          12,789       120      11,909       12,230              -321

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